Top Rite Aid executives grumbled about a widespread shoplifting problem in New York City after the retailer reported worse-than-expected quarterly results on Thursday.
Rite Aid CEO Heyward Donigan told analysts the company “experienced unexpected headwinds this quarter from front-end shrink, particularly in our New York urban stores.”
He noted the company has begun “shrinking our footprint” in New York City as it proceeds with a plan to close dozens of less-profitable stores.
The company said a $5 million year-over-year increase in “shrink” – a term in the retail industry meaning losses related to theft, fraud or administrative errors – had cut into its profits. Rite Aid’s chief retail officer Andre Persaud expanded on the point – stating NYC-area losses from shoplifting had worsened despite the company’s efforts to improve “product protection.”
“I think the headline here is the environment that we operate in, particularly in New York City, is not conducive to reducing shrink just based upon everything you read and see on social media and the news in the city,” Persaud said.
Persaud said Rite Aid is exploring ways to maintain operations in some communities where retail theft has weighed on store bottom lines – including testing pharmacy-only store formats.
“We’re looking at literally putting everything behind showcases to ensure the product’s there for customers who want to buy it,” Persaud added. “And then lastly, we’ve even had to go to the extent of using off-duty police officers in some of our stores, just into some of these communities also.”
The Post has reached out to Rite Aid for further comment on the situation.
Rite Aid shares plunged as much as 29% in trading Thursday on the retailer’s dismal second-quarter results.
The company posted a net loss of $331.3 million, or $6.07 per share. Revenue plunged to $5.9 billion, down from $6.11 billion in the same period one year ago.
Rite Aid said the downtick in revenue was “largely due to a reduction in revenue from COVID vaccines and testing, store closures and a planned loss of covered lives at Elixir.”
The retailer’s stock is down about 66% this year.
As The Post has reported, NYC-area Rite Aid stores have been bombarded with theft this year – with shoplifters calmly taking items from shelves in plain view of cameras.
For example, the Rite Aid at the corner of Eighth Avenue and 50th Street in Hell’s Kitchen lost more than $200,000 in stolen merchandise over just a two-month span. The store closed in February.
“They come in every day, sometimes twice a day, with laundry bags and just load up on stuff,” one store employee told The Post about the Rite Aid thieves.